We've all heard it countless times before: the most important factor in your company's success isn't the idea or business plan, but the quality and strength of your team. What we hardly ever hear is that the diversity of your team can play a significant role in driving success. As the male half of the male/female founding duo behind organic tampon startup Cora, gender diversity is at the heart of our team. Yes, I know period management isn't exactly a trending market for male founders. Gender diversity leads to greater profitability, more innovation, better problem solving and even a boost in opportunity for future women in business.
1. Greater Profitability
Of course you want a more profitable business, who wouldn't? A study by Harvard Business Review finds that companies who transitioned from leadership positions held by 0 percent women to 30 percent women see a 15 percent increase in profitability for the average company, or 1 percent bump in net margin.
If profit isn't enough, how about beating your competition? Companies with the most gender diversity are 15 percent more likely to outperform their industry averages according to McKinsey (the results are even more compelling for ethnically diverse companies).
Traditional roles may be flipped at Cora, as a startup working on women's rights and health, where we have a male on our founding team. Our team is currently 71 percent female and we know this diversity helps us approach disagreements and challenges as well as our strategy with perspective that would be tougher in a less diverse team. This perspective comes from better problem solving and more creativity, both skills performed by more diverse teams.
2. More Innovation
We all know innovation is critical to the survival and growth of your company. When women hold a portion of leadership roles at companies that prioritize innovation, those companies consistently generate better financial gains.
So if gender diversity is so beneficial, who's taking action? Many companies are establishing plans to add more women to their ranks. For example, global athletic brand Adidas has increased its proportion of women in management to a 2015 goal of 35 percent. Surely Adidas has multiple motivations for this priority and program, but companies of all size are adjusting their historic behavior for one key reason: diversity is great for business.
At Cora, we've quickly innovated in this tired space as a result of our diverse team. My co-founder Molly Hayward was focused on the safety, health and performance of the organic tampons we'd offer given her dismay and concern with the products offered to her as a longtime tampon user. But as a non-user, I was able to research and design accessories for storing and carrying tampons that I saw as an opportunity because I had no history or preconceptions of what managing one's period had to include (or not include).
3. Problem Solving
Being better problem solvers helps your team reach clever solutions, execute faster and ultimately perform better. Increased diversity in teams, and even the awareness of this diversity, leads teams to handle conflict better. Diversity cues team members to be alert for differences of opinion. Eventually, when conflicting opinions eventually surface the team isn't surprised and acts more openly to reach an outcome that includes the entire team's perspectives.
Research reveals that groups made up of similar people process information without as much care as groups with a more diverse makeup. Diverse groups, on the other hand, experience increased performance and problem solving because the inherent differences in the group caused them to interpret information more carefully.
4. Future Opportunity
Less than 10 percent of venture capital backed startups have at least one female founder. This is hardly fair given that that startups with at least one female founder performed better than startups with all-male teams by 63 percent according to First Round. Further compounding the issue, the number of female partners at VC firms decreased from 1999 to 2014 according to Babson College, and VC firms with female partners are twice as likely to fund female-founded startups.
In short, the more women in your company's core team and leadership ranks, the more women who are likely to become future founders and investors and in turn create the next generation of women-led companies.
Incorporating diversity in your team isn't going to be easy, just as building a Tampon business as a gender diverse team at Cora isn't easy. But then again, growing a successful business is never easy. The easy path isn't the best path, as the evidence is clear: include more women (and create more female friendly policies) in your leadership and management not just because you should, but because you will have a more profitable and more innovative business that creates the stage for the women of the future.